The Job Market Where No One Is Happy

The Job Market Where No One Is Happy—And a Path Forward

Recent research from isolved’s Fifth-Annual HR Leaders

Report draws a vivid picture

July 30, 2025

By Chris Harvey

The 2025 job market finds both job seekers and employers in a challenging and frustrating position. Despite headlines pointing to a

white-collar recession—marked by widespread layoffs and jobseeker anxiety—over 7 million positions remain open nationwide. More than 60% of HR leaders say hiring is harder than ever, while only 17% report ease in filling positions, challenging the long-held notion that labor market dynamics are just a matter of supply and demand. Instead, we’re seeing a market that isn’t clearly in the hands of either employers or employees, but one where both sides feel anxious and confused.

Recent research from isolved’s Fifth-Annual HR Leaders Report: Elevating HR in the Age of AI draws a vivid picture:

65% of HR leaders believe power is swinging back to employers, yet most organizations still can’t fill critical roles as quickly—or as well—as they need.

69% expect hiring challenges to persist through the year, and 62% identify a talent crisis in their industry, driven more by a mismatch of skills and systems than by a lack of available workers.

48% acknowledge a self-inflicted skills gap within their organization, indicating that hiring woes are often the result of static job requirements, outdated recruitment methods, and slow adaptation to new talent expectations.

What’s Really Making the Market Stuck?

The data uncovers a common thread: the core dysfunction isn’t a lack of people—it’s a lack of adaptation to a rapidly changing labor market and the need for new approaches in sourcing, evaluating, and engaging talent. Notably:

38% of HR leaders say their recruiting struggles stem from outdated strategies and a failure to innovate—not a pure talent shortage.

Only 37% say they’re actively solving the crisis through proactive, innovative approaches, while 30% admit to relying on legacy practices that miss their target audience.

Regarding metrics, only 18% of HR leaders believe their current numbers truly predict success, while more than 75% say they need to overhaul or update how they measure recruiting results.

What About Gen Z and the Future?

The youngest segment of the workforce, Gen Z, expects seamless, digital-first experiences. Yet only 34% of HR leaders believe they’re meeting those expectations, and 20% admit they aren’t focused on this group, risking relevance and missing out on a vital talent pipeline.

The isolved’s HR Leaders Report contains additional insights on embracing AI, the talent crisis, prioritizing employee total wellness, and more.

DOWNLOAD THE REPORT

What HR Leaders Identify as Blocking Progress

In order of frequency, HR leaders cite:

Shortage of quality candidates
Remote work expectations
Limited bandwidth to process applications
Insufficient professional development opportunities
Weak referral networks and inability to offer competitive pay

However, the so-called "shortage of candidates" often masks deeper issues—skills gaps, ineffective technology, and too-rigid hiring frameworks.

Where Do We Go From Here?

isolved’s research paints a clear way forward:

Modernize hiring with data, technology, and candidate-focused processes. AI is seen as a key enabler, with 69% of HR leaders using it for recruitment and analytics alongside a rethink of outdated hiring processes.

Elevate employee experience and well-being as a business imperative, not a perk. One-third of HR leaders see improving employee experience (EX) as their biggest strategic opportunity, yet many organizations still undervalue its direct impact on attraction and retention.

Rethink recruitment strategies: Innovate with employee advocacy, referral programs, alumni hiring, and third-party RPO partners for hard-to-fill roles.

Invest in upskilling and reskilling, with 43% of HR leaders citing the need to close internal skills gaps to remain competitive.

Final Thought: Self-Inflicted or Structural Crisis?

Is there a talent crisis? Most HR leaders say yes, but over a third point to outdated strategies and missed innovation as the source. Only

one in four believe the problem is purely a lack of skilled workers.

Ultimately, both job seekers and employers are dissatisfied—not because of an absolute lack of opportunity, but because the system that matches talent with meaningful work is overdue for change.

To reveal additional research and insights, download the full isolved’s Fifth-Annual HR Leaders Report: Elevating HR in the Age of AI.

Thank You to isolved

I’d like to thank isolved for providing me with an opportunity to dig into the isolved’s Fifth-Annual HR Leaders Report: Elevating HR in the Age of AI and for sponsoring today’s edition of the HR Tech Compass Newsletter.

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